By Amaya Seidl
Since its public introduction just over two weeks ago, the Green New Deal, proposed by congresswoman and self-proclaimed radical Alexandria Ocasio-Cortez, has stirred up a great deal of controversy across the political spectrum. The ambitious resolution calls for a drastic reformation of the US economy in order to eliminate greenhouse gas emissions and ultimately slow climate change, in addition to various indirectly related policy goals, such as a job guarantee, food and housing security and various social justice initiatives.
Highlights of the proposal include eliminating combustible engines, largely abandoning air travel in favor of nationwide high-speed rail, and either updating current buildings to satisfy a goal of optimal water and energy efficiency, or constructing new buildings that satisfy these standards. To address the particular burden such dramatic changes would place upon minority communities, Ocasio-Cortez included the promise of “providing higher education, high-quality health care, and affordable, safe, and adequate housing to all”. All of these proposals, of course, would require massive funding and an expansion of government power that is perhaps even more daunting.
When examining the GND proposal, it’s easy to see that it includes a whole lot of answers to the question: “What?”, listing a plethora of bold economic feats, but only limited and vaguely-worded explanations for the question: “How?” and no indication of an answer to: “How much?” when it comes to cost estimations. Thus, the resolution has raised the eyebrows of politicians, economists, and civilians alike considering its immense cost.
To predict the answer to “How much?”, former Congressional Budget Office Director Douglas Holtz-Eakin concluded: “The first cut at a grand total runs from $51.1 to $92.9 trillion between 2020 and 2029. Even if the estimates are 5 to 10 times too high (and I suspect they are more likely too low), it is hard to wrap one’s head around numbers these large.” These estimates indicate an annual cost per household of up to $650,000, which is no joke. Beyond this, the opportunity cost of transforming the entire economy within a small window of time at the expense of some of its largest industries is inestimable.
When it comes to answering the “How?” question, AOC and her supporters rely on brief and nonspecific arguments. Occasio-Cortez herself answers: “The same way we paid for the New Deal... The same way we paid for World War II and all our current wars”, dodging the nuts-and-bolts of it all.
The reality is that FDR’s original New Deal, whose name the GND is inspired from, costed upwards of $50 billion, but according to Jim Powell of Forbes, “We aren't paying down these obligations inherited from the old New Deal. On the contrary, the total tab keeps getting bigger every year. While the old New Deal involved unprecedented peacetime spending during the 1930s, its current escalating obligations dwarf that spending.”
Eventually, AOC referenced specific funding strategies for her proposals, such as the Federal Reserve expanding credit and the introduction of new “investments” and public banks. Still, she quickly retreats to the argument that it’s not the cost of the GND that we should be concerned with, but instead the massive societal benefits that it will bring in the long run, and such emotional rhetoric dominates the pro-GND sphere.
The Green New Deal has gained the support of numerous democrat presidential candidates, including Kamala Harris (CA) and Elizabeth Warren (MA). However, more moderate representatives question the feasibility of such a bold plan, but support its concepts loosely. When questioned by Politico, Speaker Nancy Pelosi remarked: “It will be one of several or maybe many suggestions that we receive. The green dream or whatever they call it, nobody knows what it is, but they're for it right?”, suggesting the GND shows no particular promise. Predictably, Republicans oppose the Green New Deal, mainly due to its liberal economic policies.
Support it or not, AOC and her Green New Deal are missing a major piece of the puzzle. It’s illogical and dangerous to pursue such a daring resolution without weighing the opportunity cost against the benefits. Perhaps its most concerning element is the theme of big government, which permeates the entire resolution and rightfully raises questions about underlying motives to increase government power. Ultimately, it seems the American people, republican and democrat alike, simply aren’t ready to sacrifice the economic freedom characteristic of a free market economy and emphasized in our current mixed economy in favor of a dramatic shift towards a command economy model that would inevitable with the adaptation of the Green New Deal. In the end, it comes down to cost-- both economic and ideological.
Works Cited
“Original Green New Deal FAQ” NPR, NPR, apps.npr.org/documents/document.html?id=5729035-Green-New-Deal-FAQ.
“Green New Deal Report.” Data For Progress, Data For Progress, www.dataforprogress.org/green-new-deal#afford.
Grunwald, Michael, et al. “The Trouble With the 'Green New Deal'.” POLITICO, POLITICO, 15 Jan. 2019, www.politico.com/magazine/story/2019/01/15/the-trouble-with-the-green-new-deal-223977.
Kurtzleben, Danielle. “Rep. Alexandria Ocasio-Cortez Releases Green New Deal Outline.” NPR, NPR, 7 Feb. 2019, www.npr.org/2019/02/07/691997301/rep-alexandria-ocasio-cortez-releases-green-new-deal-outline.
Natter, Ari. “Alexandria Ocasio-Cortez's Green New Deal Could Cost $93 Trillion.” Bloomberg.com, Bloomberg, 25 Feb. 2019, www.bloomberg.com/news/articles/2019-02-25/group-sees-ocasio-cortez-s-green-new-deal-costing-93-trillion.
Ocasio-Cortez, Alexandria. “Text - H.Res.109 - 116th Congress (2019-2020): Recognizing the Duty of the Federal Government to Create a Green New Deal.” Congress.gov, 8 Feb. 2019, www.congress.gov/bill/116th-congress/house-resolution/109/text.
Powell, Jim. “The 'Old' New Deal Still Isn't Paid For.” Forbes, Forbes Magazine, 19 June 2013, www.forbes.com/2009/02/11/new-deal-stimulus-opinions-contributors_0211_jim_powell.html#4ae4403a45b3.
Good analysis of the current plans out there! I would like to defend this proposal as not substantive economic policy that should be followed to a t but rather a proposal on where the country needs to go and listing very clearly the goals the democratic party should pursue should it take power with a substantial majority. It is also an attempt to unite the constituencies of those voting for economic justice and those voting for climate justice. What AOC and the supporters of the Green New Deal are trying to do is not so much an economic agenda but a political move to shift the Overton Window to the left. The Overton Window is a political science term that encapsulates what is acceptable debate. This would never have been proposed a decade ago and even three years ago it would have been looked on as absolutely insane. However as this proposal gains steam as a concept, if not in legislation, it paves the road for more moderate democrats to get on board with some of the proposals and debate the merits on how to fund and how to accomplish the goals put forward the next time their party takes power. Although there is no substantive proposal as to how to fund this and how much it will actually cost, it should be noted that this is not just a policy proposal but one to mobilize the entire society to fight climate change which has the potential to cost much more in the long run than the Green New Deal.
ReplyDeleteWith how large the economic cost that was brought up, it would be very hard to fully put this into action. Not only transferring what kind of energy we are using to try and make us go greener as a country would be very difficult, it won't help to greatly climate wise as it isn't just the US causing these issues. According to CNBC, we give off 26 to 28 percent of the entire world pollution. At first glance this seems like a very big percentage that also needs to be lowered. Well, China is the leading cause of pollution but in total it's over 40 percent of the world's pollution between the two of us. With that in mind, trying to lower emissions in just one country won't do too much to the climate change since China is still producing the pollution at the same rate. I don't think it's a good idea to sacrifice so much money and expenses on this proposal if it isn't going to do too much with climate change in the long run and put the economy at risk. All business would need to try and find a new way to get energy which will be very hard for places that are up north (IE Wisconsin) since we aren't by any oceans, or don't get sun all the time.
ReplyDeleteHere is the source I used.
DeleteSchoen, John W. “Here's How US Carbon Pollution Stacks up with the Rest of the World.” , CNBC, 31 May 2017, www.cnbc.com/2017/05/31/how-us-carbon-pollution-compares-with-the-rest-of-the-world.html.
I thought the post was both well researched and well written, but I think you could have expanded upon the opportunities for a middle ground provided by the deal. You brought up and effectively discussed the opportunity cost of the deal, but you could have then talked about how examining the marginal costs and benefits could result in a more feasible economic plan. With such a radical plan, the opportunity to talk about possibilities for moderation are there, but not expanded upon in this post. Additionally, comparing the Green New Deal to previous plans similar to it may have allowed you to establish a precedent so that we could see how radical the deal is.
ReplyDeleteI agree with your article. The Green New Deal is too costly and doesn't have a funding plan that can make it viable. But unlike some other comments I still think that the U.S. should pursue small steps to counter pollution. If every country says "Why bother being clean if another country will keep polluting". Then there is no hope for any type of change. Whether you believe in the overall argument of global warming or not you should want to support not seeing trash in the oceans, oil spills or foggy air that are all obvious and easily measurable. I think the U.S. should lead by example with small steps toward a cleaner greener world by taxing carbon emissions and providing more subsidies for clean energy. Not a whole overhaul within ten years but a steady climb within the century. "The journey of a thousand miles begins with one step" -Lao Tzu
ReplyDeleteReally interesting article Amaya! Thinking about the Green New Deal economically, if enacted upon, it will cause an increase in the real GDP during its first year because of the increased government spending. However, as the deal goes on, the real GDP will start decreasing because consumers will have to pay more taxes and will have less purchasing power. My thought on the opportunity costs of the deal is that yes, we will have to pay more taxes, but I think it is worth us moving towards a future where we have security and confidence that our climate will not destroy us. As for the GND causing the economy to shift from free market to command, I believe that by regulating some aspects of society such as environment and social initiatives, the government will not influence the citizens to act a certain way economically or control big aspects of our lives. I agree with you that if the GND is enacted rapidly, it will cause confusion and maybe even terror, and so I think that this should be an initiative that is started gradually and should not be rushed.
ReplyDeleteIt's not doubt that this proposal is very extreme in its approach to reducing pollution specifically green house gasses, and while I personally don't think this plan is very practical it is becoming more obvious that something needs to be done about the climate. Every year we see an increasing amount of pollution, climate change, and emissions. For the most part these problems have been ignored with an "out of sight out of mind" mentality. However as the state of our planet gets increasingly worse, I believe it will get to a point that cannot be ignored anymore. It will be interesting to see what other plans get proposed and how these plans will affect the economy. I think that we need to provide more incentives to businesses to decrease their emissions/pollution in the form of tax breaks.
ReplyDeleteI entirely agree with your argument that the Green New Deal is an economic nightmare because of its incredibly high cost and lack of clear plans and directions. Additionally though, my biggest grievances are what it plans to cut. The Green New Deal proposes to entirely eliminate Nuclear Power, the cleanest, most sustainable, and most efficient source of power currently available. There is no logic to this argument if the makers of this policy, including Ocasio-Cortez, really believe it's purpose is expanding Clean energy. It also aims to eliminate ALL air travel, an innovation which launched the world into a global economy. There is also suggestions of banning all livestock consumption meaning no more meat, eggs, dairy, or any animal derived products whatsoever. This would be an economic nightmare for the agriculture industry but also to the American consumer. The plan to replace all transportation with electric bullet trains is shortsighted because the majority of electrical energy today is powered by coal. In order to completely eliminate fossil fuel production of energy, I've heard some estimates that it would take allocating an amount of land the size of California to fill with only solar panels and wind turbines (both extremely inefficient forms of power generation) just to power parts of the US. Additionally, the policy aims to give MONEY to people UNWILLING to work and well as give universal basic income plans. These only set the stage for the government, rather than the market to decide what people will be able to earn in wages. It seems this policy serves more to create an inefficient socialist system of government more than it does to preserve and protect our natural resources. Overall, the green new deal is a fiscal nightmare but also a nightmare for the American consumer and American TAXPAYER.
ReplyDeleteI read through the GND resolution [1] and I couldn't find it saying anywhere that the US should eliminate ALL air travel nor that it should eliminate nuclear power. It does state one of the goals is to expand and upgrade renewable sources of energy and investing in existing green manufacturing and industry ([1] P.7 L.8, 19), but no specific mention of nuclear power. It doesn't mention air travel, just says we need to invest in public transit and high speed rail ([1] P.8 L.13-22). I will concede that "overhauling transportation systems" is pretty vague, especially out of context, and can be misinterpreted by supporters and adversaries of the resolution.
DeleteFurther, I couldn't find anywhere that the GND went vegan (pardon the joke) and suggested banning all livestock consumption. On P.8 L.1-12 it goes into "...supporting family farming by investing in sustainable farming and land use practices..." but nothing on banning an entire section of the agricultural sector.
I couldn't find anything on universal income plans either or where it gives money to people who are UNWILLING to work. There is a lot of talk about providing more public jobs (which requires people having the will to work), strengthening unions, and enforcing workplace health and safety standards (examples found on P.11 L.14-23 and P.12 L.4-21).
If I am missing anything, such as statements from head GND supporters, that would prove my rebuttal inadequate feel free to share with me.
To get to my actual point, it's easy to just write the GND off as some socialist fiscally irresponsible resolution with no plan of action for how to finance it (at least, not in the resolution itself), and I'm not trying to defend putting out resolutions with a whole lot of "what" and no "how." But when Republicans such as George W. Bush put a statement out saying they want tax cuts (which contributes an estimated $488 billion to the national deficit [4]) you don't see quite as much bitter upheaval about how we're already in a deficit, or what are we going to cut in order to pay for this. The point of these sorts of resolutions is to put out a policy statement, or an idea on what policy should be.
There is also a discrepancy in priorities that must be addressed. Very few who decry the GND ask how are we going to pay for US oil subsidies, which is estimated to be between $10-$40 billion per year ([3], which compares G7 countries, states $27 billion), or how are we going to pay for those wars in Iraq and Afghanistan with an estimated cost of $127 billion per year [4]? These are costs the American TAXPAYER is burdened with.
To conclude, is full green between 2020-2029 feasible? Maybe not, but the GND has gotten people to start talking about its goals, how they can be achieved and where a potential middle ground could be found. In that way the GND can evolve into something more concrete maturely through public and private discourse into something substantive that would create a net positive benefit for America.
On a personal note I am willing to pay marginally higher taxes to make sure everyone has access to clean water (Flint, Michigan for example [5]), as I am included in everyone ([1] P.6 L.21). It's sections like this that show even if you don't agree with the entirety of the GND, there are some pretty good ideas found in it.
1: https://www.markey.senate.gov/imo/media/doc/Green%20New%20Deal%20Resolution%20SIGNED.pdf
2: https://www.thebalance.com/government-subsidies-definition-farm-oil-export-etc-3305788
3: https://www.nrdc.org/experts/han-chen/g7-countries-waste-100-billion-year-coal-oil-and-gas
4: https://www.budget.senate.gov/ranking-member/newsroom/press/report-if-not-for-republican-policies-the-federal-government-would-be-running-a-surplus
5: https://www.npr.org/sections/thetwo-way/2016/04/20/465545378/lead-laced-water-in-flint-a-step-by-step-look-at-the-makings-of-a-crisis
Great column! I agree with your statements that there really is no conceivable way of understanding really how much it costs to get all of the GND promises done. I think often times nowadays we ask ourselves "wouldn't it be great if..." a lot and while it would be great if everyone had access to health insurance, and it would be great to not have any greenhouse gas emissions, it simply is not feasible because money does not grow on trees. If a politician were to propose a plan in which they actually had a logical and real way of paying for something like this without jeopardizing the economic freedom of Americans, then fine, but until then, we don't have anything close to a way of coming up with 50-90 trillion dollars in ten years.
ReplyDeleteThis is Big if True; if legislation gets passed, as the most harmful per capita towards the environment, the United States can do the most to close the carbon divide. In France, sure they can decrease emissions, but they get all a good amount of their energy from Algeria. Personally, the rail line attracts my greatest interest. Transportation is one of the largest pollutants into the atmosphere, and public transportation is one of the most effective ways of lessening its effects. You get a large amount of people in subway systems into a small space, and that's carbon efficent. There is backlash in America due to our largeness, but as cities get bigger and we see places like Milwaukee creep ever westward, and if I had my way, every major city would have a train.
ReplyDeleteThis was a great post. While I'm fine with some parts of the GND like the carbon tax, there are some aspects of it that are unrealistically hopeful at best. Sharing Noah's sentiments, I too would be very excited by the prospect of a high speed rail system in the US, but the implementation of such a system outside of connecting rail systems between major cities would be nearly impossible without astronomically high costs to build them given the vast distances between American megalopoli resulting from the abnormally inconsistent population densities stemming from the country's unique geography and the urban sprawl and increased suburbanization encouraged by the National Highway System. Even so, the major cities such rails would connect already have functional and somewhat fast trains as of now, ultimately spending money on a market that may not exist given the American preference for cars over public transportation, an unfortunate reality that possibly no amount of spending on transportation improvements could remedy.
ReplyDelete